Microeconomics 1

• 26 hrs lectures
• 26 hrs exercises

The goal of the course is to teach student to "think like an economist," which will help students to understand the world around, make better economic decisions in own life, and be a more informed citizen and voter. The course focuses on economic theory and therefore will often rely on abstract concepts. However, the course will emphasize the application of these concepts to real world situations through frequent in-class discussions of current events and interactive learning exercises.
Student will know theoretical approaches from a microeconomics area and he/she will understand the role of market to other microeconomics entities and he/she will make a critical analysis of real feature from microeconomics area.

This course does not assume any prior knowledge of economics.

• KRUGMAN, P. Microeconomics. PALGRAVE MACMILLAN 2024, 7th ed. ISBN 9781319415914.
• HOLMAN, R. Mikroekonomie - středně pokročilý kurz. 3. vyd. Praha. C.H.Beck. 2018. 623 s. ISBN 9788074002601
• VARIAN, H.R. Intermediate Microeconomics: A Modern Approach. 10.vyd. W. W. Norton & Company, 2017. 816 s. ISBN 978-1-324-03436-0.

• ŠKAPA, S. Mikroekonomie I. VUT v Brně, CERM, 2016. 140 s. ISBN 978-80-214-5391-3.
• ŠKAPA, S.; KRUNTORÁDOVÁ, M.; FOJTU, K. Mikroekonomie I - sbírka příkladů. VUT v Brně CERM, 2012. ISBN 978-80-214-4584-0.

1. The nature of economic science and the development of microeconomics - economics, microeconomics, macroeconomics, positive and normative economics; Role of economic models, traps in economic reasoning, historical development of microeconomics

2. Market system and rational human behavior - household, firm, state, market, economic cycle, market system and its rules, role of prices, rational human behavior, opportunity cost, sunk cost,

3. Demand formation - marginal utility theory and indifference theory, individual demand, income and substitution effect, changes in demand, price, income and cross elasticity of demand, market demand

4. Producer behaviour and supply formation - implicit and explicit costs, total, fixed and variable costs, average cost, marginal cost, relationships between costs, cost functions, supply curve, turning point, firm exit point, long-run and short-run equilibrium of the firm, elasticity of supply

5. Perfect competition and market equilibrium - definition of a perfectly competitive market, market equilibrium and its achievement, spider web theorem, equilibrium price, surplus, shortage, efficiency of market equilibrium, consumer surplus, producer surplus

6. Imperfect competition and monopoly - causes of imperfectly competitive environment, natural and administrative monopoly, price discrimination of monopoly, regulation of monopoly,

7. Oligopoly and monopolistic competition, monopson - oligopoly, contractual oligopoly, oligopoly with a dominant firm, long-run and short-run equilibrium of monopolistic competition

8. Markets of factors of production, labour market - production function, law of diminishing returns, firm's demand for factor of production, income from marginal product, marginal cost of factor of production, equilibrium of the firm in the factor market under perfect competition, labour market, backward-curved individual labour supply, individual labour demand, imperfections in the labour market on the supply and demand side, unemployment,

9. Capital and land markets - capital market, relationship between capital and investment, supply of credit capital, demand in the money capital market, supply of money capital in the short and long run, short and long run equilibrium in the money capital market, supply and demand for land and land rent

10. Microeconomic role of the state and the public sector - microeconomic policy, instruments to enforce microeconomic policy objectives, government failure, government intervention in prices (imposition of tax, price ceiling, price floor),

11. Externalities and public goods - negative and positive externalities, dealing with externalities, Coase's theorem, Pigou's tax, Pareto optimum, public good, public good decision making, provision of public goods and their payment

12. Behavioral economics - definition of the term, origin and development, relation to classical economics, rationality from the perspective of behavioral economics

13. Alternative theories

The basic thematic content of the exercise is as follows:

1. Information on the organisation of the exercise, credit requirements. Introduction to microeconomics. Market, types of markets, market actors and market mechanism.
2. Scarcity of economic resources and the problem of their allocation. Use of graphs in microeconomics.
3. Consumer behaviour - utility and demand
4. Producer behaviour - cost and supply
5. Market equilibrium and efficiency

6. Imperfect markets - monopoly and oligopoly

7.  

   Imperfect Markets - Monopoly and Oligopoly

8. Competition and Regulation

9. Factor Markets, Labour Markets and Capital Markets

10.  

    Microeconomic policies of the state

11.  

    State intervention in prices

12. Externalities and public goods

13.  

    Giving credit

Learning Outcomes

Expertise - Graduates of the course will be able to:

• Define and explain basic economic concepts (e.g., scarcity, opportunity cost, demand, supply, market equilibrium, elasticity, interest rate).
• Describe the basic principles of the market mechanism, including consumer theory and the theory of the firm under conditions of perfect and imperfect competition.

Professional competencies - Graduates of the course will be able to:

• Analyse the impact of various factors on demand, supply and market equilibrium using graphical models.
• Interpret basic microeconomic indicators and data.
• Apply economic principles to analyze simple real-world situations and decision making by individuals, firms or government.

Professional Skills - Graduates of the course will be able to:

• Use graphical tools (demand and supply curves, production possibilities, etc.) to illustrate and analyse economic concepts.
• Perform basic calculations related to economic variables (e.g. calculate elasticity, turning point, simple macroeconomic indicators from provided data).
• Search and process basic economic data from available sources (e.g. statistical offices, central banks).
• Formulate simple economic arguments orally and in writing using learned terminology.

Credit from the Microeconomics 1 course is obtained by achieving a minimum of 20 points out of 40 total points. Students may earn points for two written tests of 20 points each.

The requirement for the examination is knowledge of the material covered and credit obtained.

The form of the exam is written (contains about 25 examples or theoretical questions), the student can obtain a maximum of 60 points from the exam, for successful completion of the course the student must obtain a minimum of 30 points.

The grading scale for the final classification (the student can obtain a maximum of 40 points in the practical and a maximum of 60 points in the exam, i.e. a total of 100 points):

A: 90-100 points.

B: 80-89 points.

C: 70-79 points.

D: 60-69 points.

E: 50-59 points.

F: less than 50 points.

Attendance at the practical and lectures is optional.

COMPLETION OF THE COURSE FOR STUDENTS WITH INDIVIDUAL STUDIES
Credit requirements:
Same as in the COMPLETION OF THE COURSE section.
Examination requirements:
Same as in the CURRICULUM COMPLETION section.

COMPLETION OF A SUBJECT IN DISTANCE FORM (APPLIES ONLY WHEN OBJECTIVE EXTERNAL CONDITIONS
DO NOT ALLOW THE STUDENT TO COMPLETE THE PROGRAM OF STUDY CONSISTENT WITH THE ACCREDITATION ENDORSED)
Credit requirements:
Same as in the COMPLETION OF A SUBJECT section.
Examination requirements:
Same as in the CURRICULUM COMPLETION section.